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Standard XII

Accountancy

Salary/Commission

X , Y and Z a...

Question

X, Y and Z are in Partnership, sharing profits and losses in the ratio of 3 : 2 : 1, respectively. Z’s share in the profit is guaranteed by X and Y to be a minimum of Rs 8,000. The net profit for the year ended March 31, 2017 was Rs 30,000. Prepare Profit and Loss Appropriation Account, indicating the amount finally due to each partner.

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Solution

Profit and Loss Appropriation Account as on March 31, 2017

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Profit transferred to

Profit and Loss

30,000

X’s Capital

15,000

Less: Z’s Deficiency {3,000 × (3/5)}

(1,800)

13,200

Y’s Capital

10,000

Less: Z’s Deficiency {3,000 × (2/5)}

(1,200)

8,800

Z’s Capital

5,000

Add: Share of Deficiency born by

Radha

1,800

Mary

1,200

8,000

30,000

30,000

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Profit and Loss Appropriation Account as on March 31, 2017
Dr.					Cr.
Particulars			Amount Rs	Particulars	Amount Rs
Profit transferred to				Profit and Loss	30,000
X’s Capital	15,000
Less: Z’s Deficiency {3,000 × (3/5)}	(1,800)		13,200

Y’s Capital	10,000
Less: Z’s Deficiency {3,000 × (2/5)}	(1,200)		8,800

Z’s Capital		5,000
Add: Share of Deficiency born by
Radha		1,800
Mary		1,200	8,000

			30,000		30,000